ABSTRACT
The rule in Re Earl of Chesterfield’s Trust (1833) 24 Ch D 643 applies where there are different interests in a trust which includes a non-income producing asset such as a reversion or a life policy. The proceeds of the non-income producing asset are apportioned between the life tenant and the remainderman. The remainderman receives a sum which, if invested at compound interest at the date of death at 4% per annum (less income tax), would produce the proceeds of sale. The balance is paid over to the life tenant.
